Colombia | Food inflation led to decrease in total inflation: 12.8% in April

Summary

In April, monthly inflation was 0.78% and annual inflation was 12.82%, below the expectations of market analysts (who, according to the Banco de la República survey, expected a variation of 0.87%).

Key points

• Key points:
• Food inflation generated the biggest downward surprise, falling from an annual change of 21.8% to 18.5%. This is explained by declines in all sub-baskets, with perishables taking the lead, falling from 23.7% to 16.9%.
• Core inflation (excluding food) continued to rise in annual terms, but at a slower pace, increasing by 9 basis points to 11.51%. Within this, the basket of administered prices recorded the largest increase, reaching 15.3% y/y, driven by increases in fuels and a rise in water and electricity tariffs.
• The services basket was the second with the second highest acceleration, reaching a 9% annual change. Its performance was explained by pressures in rent, meals service establishments and services related to co-ownership.
• BBVA Research expects food inflation to maintain a good pace of deceleration in the coming months, although some risks associated with logistics and fuel prices may materialise. Core inflation could continue to accelerate for a few more months. However, in the second half of the year, both sub-baskets are expected to show declines in their annual variation.

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